It was a relatively quiet holiday-shortened week for mortgage markets. The economic data contained no major surprises and caused little reaction. Mortgage rates finished the week a bit lower.
As expected, the most recent inflation data revealed a slight increase. In February, the core PCE price index was 1.6% higher than a year ago, up from an annual rate of 1.5% last month. This was the highest level since May 2017. Fed officials have stated that they would like to see the annual rate of inflation rise to 2.0%.
On Wednesday, gross domestic product (GDP) for the fourth quarter of 2017 was revised higher from 2.5% to 2.9%. This is the broadest measure of economic growth. GDP for the first quarter of 2018 will be released on April 27, and the current consensus forecast is for growth of around 2.0%.
Following unexpectedly weak results in January, the pending home sales data rebounded nicely. In February, contracts signed to purchase previously owned homes increased 3% from January. Despite the February gains, though, they still were 4% lower than a year ago. Contracts signed are viewed as a leading indicator of actual closings, which are revealed each month in the report on existing home sales.
Looking ahead, the important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the ISM national manufacturing index will be released on Monday. The ADP Employment Change and the ISM national services index will come out on Wednesday.
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